South African bonds gained on Monday morning, with decisive local developments at the weekend helping to down drive the cost of state borrowing.
Markets have reacted favourably to the ANC’s resolution to the recall President Jacob Zuma, effectively eliminating what some have called two centres of power, after Cyril Ramaphosa was elected a new partly leader in December.
Zuma’s tenure has been marred by controversy, which starkly played out in the mismanagement of some of SA’s state-owned entities (SOEs).
The other significant development was the sudden appointment of a new Eskom board. The power utility has been hobbled by allegations of corruption and mismanagement.
"We have been on edge for a while over Eskom as the utility is obviously pivotal in the daily running of the businesses and machinery of the economy," said Ashley Dickinson, head of fixed-income dealing at Sasfin Wealth.
"We will still face some material headwinds but at least the leadership is now showing some serious intent on steadying the ship and charting a new course forward."
Telkom chairman Jabu Mabuza will the head the new Eskom board, whose immediate task is to find a permanent CEO and chief financial officer within three months.
The new Eskom board will be seen as an example of swift action by Ramaphosa‚ who has promised to stabilise the struggling SOEs by rooting out corruption.
The yield on the benchmark R186 was bid at 8.39% in early trade, its lowest level since September, from 8.48% on Friday.
The rand was at R12.0829 to the dollar from R12.0556.
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